“We are focused on growth initiatives in telecom, data center and cloud
markets, as well as operational execution to lower our breakeven level
as
Third Quarter Summary
Non-GAAP results in the third quarter of 2017 exclude
As of
Outlook for the Quarter Ending
GAAP | Non-GAAP | |||
Revenue | $69 to $74 million | |||
Gross Margin | 19% to 22% | 20% to 23% | ||
Operating Expenses | $25 to $26 million | $23 to $24 million | ||
Earnings per share | $0.29 to $0.19 net loss | $0.23 to $0.13 net loss | ||
The Non-GAAP outlook for the fourth quarter of 2017 excludes the impact
of expected amortization of intangibles of approximately
Non-GAAP and Adjusted EBITDA Measures vs. GAAP Financial Measures
The Company’s non-GAAP and adjusted EBITDA measures exclude certain GAAP financial measures. A reconciliation of the Non-GAAP and Adjusted EBITDA financial measures to the most directly comparable GAAP financial measures is provided in the financial schedules portion at the end of this press release. These non-GAAP financial measures differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
The Company uses these non-GAAP financial measures to analyze its
operating performance and future prospects, develop internal budgets and
financial goals, and to facilitate period-to-period comparisons.
Conference Call
The Company will host a conference call today,
A replay of the webcast will be available in the Investor Relations section of the Company’s web site approximately two hours after the conclusion of the call and remain available for approximately 30 calendar days.
About
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This press release includes statements that qualify as forward-looking
statements under the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include statements about the following
topics: future financial results, demand for the Company’s high-speed
products, the Company’s market position, the outlook for the
©2017
NeoPhotonics Corporation | ||||||||
Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
(In thousands) | ||||||||
As of | ||||||||
Sept. 30,
2017 |
Dec. 31,
2016 |
|||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 58,528 | $ | 82,500 | ||||
Short-term investments | 12,281 | 19,015 | ||||||
Restricted cash | 2,917 | 4,085 | ||||||
Accounts receivable, net | 67,003 | 80,610 | ||||||
Inventories, net | 82,809 | 48,237 | ||||||
Assets held for sale | - | 13,953 | ||||||
Prepaid expenses and other current assets | 34,568 | 22,396 | ||||||
Total current assets | 258,106 | 270,796 | ||||||
Property, plant and equipment, net | 127,316 | 106,867 | ||||||
Purchased intangible assets, net | 4,594 | 5,562 | ||||||
Goodwill | 1,115 | 1,115 | ||||||
Other long-term assets | 6,858 | 6,547 | ||||||
Total assets | $ | 397,989 | $ | 390,887 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 69,771 | $ | 84,766 | ||||
Notes payable and short-term borrowing | 19,630 | 30,190 | ||||||
Current portion of long-term debt | 5,740 | 747 | ||||||
Accrued and other current liabilities | 44,743 | 30,625 | ||||||
Total current liabilities | 139,884 | 146,328 | ||||||
Long-term debt, net of current portion | 41,029 | 10,215 | ||||||
Other noncurrent liabilities | 14,959 | 8,939 | ||||||
Total liabilities | 195,872 | 165,482 | ||||||
Stockholders' equity: | ||||||||
Common stock | 110 | 106 | ||||||
Additional paid-in capital | 542,029 | 532,378 | ||||||
Accumulated other comprehensive loss | (2,294 | ) | (8,401 | ) | ||||
Accumulated deficit | (337,728 | ) | (298,678 | ) | ||||
Total stockholders' equity | 202,117 | 225,405 | ||||||
Total liabilities and stockholders' equity | $ | 397,989 | $ | 390,887 | ||||
NeoPhotonics Corporation | ||||||||||||||||||||
Condensed Consolidated Statements of Operations (Unaudited) | ||||||||||||||||||||
(In thousands, except percentages and per share data) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
Sept. 30,
2017 |
June. 30,
2017 |
|
Sept. 30,
2016 |
|
Sept. 30,
2017 |
Sept. 30,
2016 |
||||||||||||||
Revenue | $ | 71,121 | $ | 73,214 | $ | 103,312 | $ | 216,023 | $ | 301,586 | ||||||||||
Cost of goods sold (1) | 60,608 | 56,437 | 75,863 | 170,230 | 215,486 | |||||||||||||||
Gross profit | 10,513 | 16,777 | 27,449 | 45,793 | 86,100 | |||||||||||||||
Gross margin | 14.8 | % | 22.9 | % | 26.6 | % | 21.2 | % | 28.5 | % | ||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development (1) | 14,662 | 14,206 | 17,474 | 44,412 | 42,206 | |||||||||||||||
Sales and marketing (1) | 4,071 | 3,910 | 5,936 | 12,913 | 13,674 | |||||||||||||||
General and administrative (1) | 7,637 | 7,729 | 9,822 | 26,792 | 26,747 | |||||||||||||||
Amortization of purchased intangible assets | 119 | 118 | 462 | 355 | 1,375 | |||||||||||||||
Acquisition and asset sale related costs | 78 | 21 | 148 | 229 | 923 | |||||||||||||||
Restructuring charges | 2,829 | 494 | - | 3,550 | - | |||||||||||||||
Gain on asset sale | - | - | - | (2,000 | ) | - | ||||||||||||||
Total operating expenses | 29,396 | 26,478 | 33,842 | 86,251 | 84,925 | |||||||||||||||
Income (loss) from operations | (18,883 | ) | (9,701 | ) | (6,393 | ) | (40,458 | ) | 1,175 | |||||||||||
Interest income | 37 | 31 | 95 | 141 | 227 | |||||||||||||||
Interest expense | (495 | ) | (111 | ) | (103 | ) | (743 | ) | (304 | ) | ||||||||||
Other income (expense), net | (41 | ) | (11 | ) | 18 | 197 | (828 | ) | ||||||||||||
Total interest and other income (expense), net | (499 | ) | (91 | ) | 10 | (405 | ) | (905 | ) | |||||||||||
Income (loss) before income taxes | (19,382 | ) | (9,792 | ) | (6,383 | ) | (40,863 | ) | 270 | |||||||||||
Income tax (provision) benefit | 1,195 | 451 | (804 | ) | 1,813 | (2,471 | ) | |||||||||||||
Net loss | $ | (18,187 | ) | $ | (9,341 | ) | $ | (7,187 | ) | $ | (39,050 | ) | $ | (2,201 | ) | |||||
Basic net loss per share | $ | (0.42 | ) | $ | (0.22 | ) | $ | (0.17 | ) | $ | (0.90 | ) | $ | (0.05 | ) | |||||
Diluted net loss per share | $ | (0.42 | ) | $ | (0.22 | ) | $ | (0.17 | ) | $ | (0.90 | ) | $ | (0.05 | ) | |||||
Weighted average shares used to compute basic net loss per share | 43,790 | 43,219 | 42,038 | 43,212 | 41,589 | |||||||||||||||
Weighted average shares used to compute diluted net loss per share | 43,790 | 43,219 | 42,038 | 43,212 | 41,589 | |||||||||||||||
(1) Includes stock-based compensation expense as follows for the periods presented: | ||||||||||||||||||||
Cost of goods sold | $ | 340 | $ | 324 | $ | 297 | $ | 811 | $ | 1,605 | ||||||||||
Research and development | 606 | 511 | 2,981 | 1,779 | 4,508 | |||||||||||||||
Sales and marketing | 393 | 313 | 2,352 | 1,170 | 3,604 | |||||||||||||||
General and administrative | 595 | 738 | 3,146 | 1,932 | 4,728 | |||||||||||||||
Total stock-based compensation expense | $ | 1,934 | $ | 1,886 | $ | 8,776 | $ | 5,692 | $ | 14,445 | ||||||||||
NeoPhotonics Corporation | ||||||||||||||||||||
Reconciliation of Condensed Consolidated GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited) | ||||||||||||||||||||
(In thousands, except percentages and per share data) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
Sept. 30,
2017 |
June. 30,
2017 |
Sept. 30,
2016 |
Sept. 30,
2017 |
Sept. 30,
2016 |
||||||||||||||||
NON-GAAP GROSS PROFIT: | ||||||||||||||||||||
GAAP gross profit | $ | 10,513 | $ | 16,777 | $ | 27,449 | $ | 45,793 | $ | 86,100 | ||||||||||
Stock-based compensation expense | 340 | 324 | 297 | 811 | 1,605 | |||||||||||||||
Amortization of purchased intangible assets | 202 | 203 | 853 | 667 | 2,542 | |||||||||||||||
Depreciation of acquisition-related fixed asset step-up | (68 | ) | (68 | ) | (68 | ) | (202 | ) | (194 | ) | ||||||||||
End-of-life related inventory write-down | 1,975 | - | - | 1,975 | - | |||||||||||||||
Restructuring charges | 285 | 240 | - | 564 | - | |||||||||||||||
Non-GAAP gross profit | $ | 13,247 | $ | 17,476 | $ | 28,531 | $ | 49,608 | $ | 90,053 | ||||||||||
Non-GAAP gross margin as a % of revenue | 18.6 | % | 23.9 | % | 27.6 | % | 23.0 | % | 29.9 | % | ||||||||||
NON-GAAP TOTAL OPERATING EXPENSES: | ||||||||||||||||||||
GAAP total operating expenses | $ | 29,396 | $ | 26,478 | $ | 33,842 | $ | 86,251 | $ | 84,925 | ||||||||||
Stock-based compensation expense | (1,594 | ) | (1,562 | ) | (8,479 | ) | (4,881 | ) | (12,840 | ) | ||||||||||
Amortization of purchased intangible assets | (119 | ) | (118 | ) | (462 | ) | (355 | ) | (1,375 | ) | ||||||||||
Depreciation of acquisition-related fixed asset step-up | (71 | ) | (72 | ) | (79 | ) | (216 | ) | (255 | ) | ||||||||||
Acquisition and asset sale related costs | (78 | ) | (21 | ) | (148 | ) | (229 | ) | (923 | ) | ||||||||||
Restructuring charges | (2,829 | ) | (494 | ) | - | (3,550 | ) | - | ||||||||||||
Litigation | - | - | - | 64 | - | |||||||||||||||
Gain on asset sale | - | - | - | 2,000 | - | |||||||||||||||
Non-GAAP total operating expenses | $ | 24,705 | $ | 24,211 | $ | 24,674 | $ | 79,084 | $ | 69,532 | ||||||||||
Non-GAAP total operating expenses as a % of revenue | 34.7 | % | 33.1 | % | 23.9 | % | 36.6 | % | 23.1 | % | ||||||||||
NON-GAAP OPERATING INCOME (LOSS): | ||||||||||||||||||||
GAAP income (loss) from operations | $ | (18,883 | ) | $ | (9,701 | ) | $ | (6,393 | ) | $ | (40,458 | ) | $ | 1,175 | ||||||
Stock-based compensation expense | 1,934 | 1,886 | 8,776 | 5,692 | 14,445 | |||||||||||||||
Amortization of purchased intangible assets | 321 | 321 | 1,315 | 1,022 | 3,917 | |||||||||||||||
Depreciation of acquisition-related fixed asset step-up | 3 | 4 | 11 | 14 | 61 | |||||||||||||||
Acquisition and asset sale related costs | 78 | 21 | 148 | 229 | 923 | |||||||||||||||
End-of-life related inventory write-down | 1,975 | - | - | 1,975 | - | |||||||||||||||
Restructuring charges | 3,114 | 734 | - | 4,114 | - | |||||||||||||||
Litigation | - | - | - | (64 | ) | - | ||||||||||||||
Gain on asset sale | - | - | - | (2,000 | ) | - | ||||||||||||||
Non-GAAP income (loss) from operations | $ | (11,458 | ) | $ | (6,735 | ) | $ | 3,857 | $ | (29,476 | ) | $ | 20,521 | |||||||
Non-GAAP operating margin as a % of revenue | (16.1 | )% | (9.2 | )% | 3.7 | % | (13.6 | )% | 6.8 | % | ||||||||||
NeoPhotonics Corporation | ||||||||||||||||||||
Reconciliation of Condensed Consolidated GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited) (Continued) | ||||||||||||||||||||
(In thousands, except percentages and per share data) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
Sept. 30,
2017 |
June. 30,
2017 |
Sept. 30,
2016 |
Sept. 30,
2017 |
Sept. 30,
2016 |
||||||||||||||||
NON-GAAP NET INCOME (LOSS): | ||||||||||||||||||||
GAAP net loss | $ | (18,187 | ) | $ | (9,341 | ) | $ | (7,187 | ) | $ | (39,050 | ) | $ | (2,201 | ) | |||||
Stock-based compensation expense | 1,934 | 1,886 | 8,776 | 5,692 | 14,445 | |||||||||||||||
Amortization of purchased intangible assets | 321 | 321 | 1,315 | 1,022 | 3,917 | |||||||||||||||
Depreciation of acquisition-related fixed asset step-up | 3 | 4 | 11 | 14 | 61 | |||||||||||||||
Acquisition and asset sale related costs | 78 | 21 | 148 | 229 | 923 | |||||||||||||||
End-of-life related inventory write-down | 1,975 | - | - | 1,975 | - | |||||||||||||||
Restructuring charges | 3,114 | 734 | - | 4,114 | - | |||||||||||||||
Litigation | - | - | - | (64 | ) | - | ||||||||||||||
Gain on asset sale | - | - | - | (2,000 | ) | - | ||||||||||||||
Income tax effect of Non-GAAP adjustments | (114 | ) | (192 | ) | (140 | ) | (117 | ) | (399 | ) | ||||||||||
Non-GAAP net income (loss) | $ | (10,876 | ) | $ | (6,567 | ) | $ | 2,923 | $ | (28,185 | ) | $ | 16,746 | |||||||
Non-GAAP net income (loss) as a % of revenue | (15.3 | )% | (9.0 | )% | 2.8 | % | (13.0 | )% | 5.6 | % | ||||||||||
ADJUSTED EBITDA: | ||||||||||||||||||||
GAAP net loss | $ | (18,187 | ) | $ | (9,341 | ) | $ | (7,187 | ) | $ | (39,050 | ) | $ | (2,201 | ) | |||||
Stock-based compensation expense | 1,934 | 1,886 | 8,776 | 5,692 | 14,445 | |||||||||||||||
Amortization of purchased intangible assets | 321 | 321 | 1,315 | 1,022 | 3,917 | |||||||||||||||
Depreciation of acquisition-related fixed asset step-up | 3 | 4 | 11 | 14 | 61 | |||||||||||||||
Acquisition and asset sale related costs | 78 | 21 | 148 | 229 | 923 | |||||||||||||||
End-of-life related inventory write-down | 1,975 | - | - | 1,975 | - | |||||||||||||||
Restructuring charges | 3,114 | 734 | - | 4,114 | - | |||||||||||||||
Litigation | - | - | - | (64 | ) | - | ||||||||||||||
Gain on asset sale | - | - | - | (2,000 | ) | - | ||||||||||||||
Interest expense, net | 458 | 80 | 8 | 602 | 77 | |||||||||||||||
Provision (benefit) for income taxes | (1,195 | ) | (451 | ) | 804 | (1,813 | ) | 2,471 | ||||||||||||
Depreciation expense | 7,016 | 6,794 | 4,457 | 19,608 | 12,942 | |||||||||||||||
Adjusted EBITDA | $ | (4,483 | ) | $ | 48 | $ | 8,332 | $ | (9,671 | ) | $ | 32,635 | ||||||||
Adjusted EBITDA as a % of revenue | (6.3 | )% | 0.1 | % | 8.1 | % | (4.5 | )% | 10.8 | % | ||||||||||
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE: | ||||||||||||||||||||
GAAP basic net loss per share | $ | (0.42 | ) | $ | (0.22 | ) | $ | (0.17 | ) | $ | (0.90 | ) | $ | (0.05 | ) | |||||
GAAP diluted net loss per share | $ | (0.42 | ) | $ | (0.22 | ) | $ | (0.17 | ) | $ | (0.90 | ) | $ | (0.05 | ) | |||||
Non-GAAP basic net income (loss) per share | $ | (0.25 | ) | $ | (0.15 | ) | $ | 0.07 | $ | (0.65 | ) | $ | 0.40 | |||||||
Non-GAAP diluted net income (loss) per share | $ | (0.25 | ) | $ | (0.15 | ) | $ | 0.06 | $ | (0.65 | ) | $ | 0.37 | |||||||
SHARES USED TO COMPUTE GAAP AND NON-GAAP BASIC NET INCOME (LOSS) PER SHARE | 43,790 | 43,219 | 42,038 | 43,212 | 41,589 | |||||||||||||||
SHARES USED TO COMPUTE GAAP DILUTED NET LOSS PER SHARE | 43,790 | 43,219 | 42,038 | 43,212 | 41,589 | |||||||||||||||
SHARES USED TO COMPUTE NON-GAAP DILUTED NET INCOME (LOSS) PER SHARE | 43,790 | 43,219 | 46,745 | 43,212 | 45,612 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20171106006295/en/
Source:
NeoPhotonics Corporation
Beth Eby, +1-408-895-6086
Chief
Financial Officer
ir@neophotonics.com
or
Sapphire
Investor Relations, LLC
Erica Mannion, +1-617-542-6180
Investor
Relations
ir@neophotonics.com